Two Big Reasons that Sponsored Data Sucks

At CES this week, AT&T announced a bunch of stuff, but the biggest is arguably their new ‘Sponsored Data’ product. You can read the full announcement here, but essentially, Sponsored Data is similar to 1-800 numbers for your mobile data plan. Companies can pay to ‘sponsor’ your data usage when you visit their site or use their service, so that you don’t get charged for the mobile data needed to access it.

I’ve written about why things like this suck before, but this is a direct attack on net neutrality, and we should definitely expect to hear more about this as AT&T gets closer to actually launching it. Sponsored Data sucks for consumers for two BIG reasons:

1. The first, and most serious, is that it allows AT&T to decide who wins and loses online. While there are some limits in place today, and AT&T promises that users will not see a performance difference between ‘Sponsored’ and ‘Unsponsored’ content, it sets the stage for AT&T to allow their customers to get access to AT&T’s ‘selected partners’, and likewise, allows AT&T to make it harder for consumers to get access to brands or services that aren’t ‘AT&T-approved’. For instance, with Sponsored Data, AT&T could offer free access to Pandora streaming radio over your mobile plan, but still charge you data for using Spotify, if Pandora had deep enough pockets to afford it. Users don’t get a voice here, it’s purely AT&T scraping for coins.

2. The second, and probably most concerning, is how consumer-UNfriendly this move is. When AT&T (and all the other carriers, basically) switched to data caps on mobile Internet plans, they neglected to offer consumers a reliable way to monitor that data. Even today, years later, most people that I know have no idea how MUCH data they use, except they know it’s less than their plan allows. There’s no way for a user to verify their own data usage, so they’re reliant upon the carrier to tell them, and we all know how honest those carriers are when it comes to usage and charges…

With Sponsored data, consumers will supposedly see a different icon on the status bar of their device, in place of or near the ‘4G’ or ‘LTE’ icon they see today. However, how many consumers even know what those mean, or that they’re there? It’s still incredibly confusing for consumers, and if I’m reading between the lines, that’s probably half the point, at least for AT&T.

It’ll be interesting to see how this pans out. We’re seeing more and more reports of Internet Service Providers try to squeeze more money out of their networks, and the FCC has, thus far, not commented. I expect them to chime in, or hopefully there’ll be a lawsuit of some kind to highlight how terrible this is for consumers.